An industry critic's view of our rich content future

The smartwatch movement inspired me recently, which is surprising because I haven’t worn a watch since I started carrying a smartphone many years ago. I’m about as far as you can get from being a fashionista and I liken a watch to other obsolete single-use devices like the GPS. I doubt I’ll buy one anytime soon but I believe the device synchronization model used by smartwatches lends itself to content distribution as well.

You’re probably aware of how most smartwatches get paired with your smartphone. Although they don’t have all the capabilities of a smartphone, things like text messages and phone calls can be redirected from your phone to your watch, thanks in large part to Bluetooth technology. Your phone communicates with your watch the same way your phone connects with a wireless headset or desktop Bluetooth speaker, for example.

Let’s fast-forward to the day when we’ve all become peer-to-peer content distributors. Rather than relying on centrally-managed and hosted sites and services that handle everything from reviews to downloads, this peer-to-peer model means we’re doing all that for each other using Bluetooth or some other simple networking protocols. For example, your phone or computer can easily be turned into a wifi server, allowing you to connect multiple devices to it; that's a capability that exists today and I'm suggesting it could be extended for new uses in the future.

The Kindle introduced a whole new level of reading privacy. Once upon a time on a crowded bus you could see the cover of the book being read by the person across the aisle. Now we’re all masking our reading habits with tablets and phones. No, I’m not suggesting we embrace an overly intrusive model that has privacy advocates screaming in the streets. Rather, I believe a peer-to-peer model could be used to improve discovery and consumption at the hyperlocal level.

Think of the hundreds of riders on a commuter train each morning. Maybe they’re traveling from the northern suburbs into Manhattan. Some of them are neighbors. Many of them are businesspeople. All of them probably follow and read some type of news. Instead of just knowing the top global trends on Google, wouldn’t it be interesting to know what news stories your fellow commuters are reading?

The same concept can be applied to passengers on a plane or even homeowners in a neighborhood. Just as NextDoor.com has disrupted Angie’s List and brought communication and recommendations to the local level, I suggest a peer-to-peer model could do the same for content.

The peer-to-peer aspect really shines when you consider how the content gets from my device to yours. That news story I just read on TheGuardian.com still lives in my browser’s cache. If enough of my fellow commuters read the same article, it floats to the top of the popular news list for our little commuter community. You click the link to it in our peer-to-peer content app and the article is pulled from my cache to your device.

In short, we’re distributing content to each other, without having to go up and down, to and from a central server. Wouldn’t this be terrific on a 4-hour flight with no wifi? Each of our devices acts as a mini-server, hosting content for everyone else.

Publishers would freak out over this model, at least initially. They’ll no longer control distribution and it will create holes in their analytics. I’m sure most, if not all, publishers have something buried in their terms and conditions preventing this sort of thing, but those who want to embrace broader distribution and consumption will eventually warm up to it.

Btw, the model isn’t limited to web pages. Think about the benefits this offers the book publishing sector. What if you could see a list of the popular ebooks in your neighborhood or among your fellow commuters? And what if you could pull a sample of one of those popular titles from someone else’s device, again, a particularly useful solution when you’re outside wifi and cellular range? If you decide you like that sample and you end up buying the ebook your peer-to-peer commuter friend gets credit for the sale with an affiliate cut of the resulting transaction.

We place way too much emphasis on the ability to measure global trends. You see it every day on Google, Twitter, etc. While we all care about these global trends, we’re also keenly interested in local and hyper-local trends. This peer-to-peer model addresses that point while also providing some relief for data plan limits and spotty wifi coverage.

Every digital newspaper, magazine and book I’ve ever purchased from an e-retailer share something in common: None of them included a pitch from the publisher to lure me away from the e-retailer and go direct. Not a single one.

This, despite the fact that it’s never been easier, or more important, for publishers to diversify their channel strategy and focus on their D2C business. Pretty remarkable. It’s even more amazing when you consider that more and more publishers are finally starting to wake up to the importance of either building a D2C channel or fortifying it.

Here’s the easiest solution possible for publishers to remedy this situation: Make sure a compelling message from you is the first thing consumers see when they open the indirectly-distributed version of your product. What does that look like?

In general, it’s something like this: “Thanks for buying this e-paper/e-mag/ebook. Are you aware of the benefits of buying your next edition/product directly from us? Click here to learn more.”

Again, that’s the very first thing a reader should see when they open your product. When you do this you’ll be using the enormous power and reach of the retailer network to build your own D2C network.

Why doesn’t this happen today? The first reason is that most publishers probably haven’t even thought of this tactic. The second reason is that publishers are worried about retailer retaliation if they implement it. If that has you worried, consider this: Can a retailer actually dictate what content is and isn’t acceptable in your product? Although Amazon, for example, tends to be extremely bold I think even they would realize this would be overreach on their part.

Would that prevent them from making the publisher feel the pain? Probably not, but it could create a very interesting situation, both legally and in the court of public opinion.

Simply inserting this D2C messaging is only step one, of course. Publishers need to deliver and provide a compelling reason for consumers to buy direct. Here’s a hint on how to solve that problem: Make sure the most valuable, feature-rich version of your product is only available direct from you, the publisher. That’s not too hard to do, btw. If you’ve ever subscribed to an e-newspaper through a digital retailer you know what I mean; the user experience is awful, particularly when compared to the full digital replica edition. Ebooks represent a similar opportunity; publishers should make sure the richest, most compelling edition is only available from them, not third-party retailers.

When will publishers wake up and leverage this approach? Some will, but most won’t, largely because of the fear factor noted earlier. The most successful, vibrant publishers of the future will make this a standard practice though and fear of retailer retaliation will disappear.

Unless your organization is a startup it’s highly likely you’re using a strategy and business model that’s worked for many years. That same strategy and business model might span multiple generations. Even though you’ve embraced the latest technologies and devices, are you also meeting the needs and expectations of the younger generation?

Here are four key points you need to consider:

Ownership – Remember the days when Steve Jobs suggested that consumers want to own their music, not rent it? That’s probably still largely true for anyone over 30 but Millennials have grown up with Spotify and Pandora. And if they’re willing to rent songs, which get consumed repeatedly, why do we think they’ll insist on owning a book they’ll only read once? The content streaming/rental segment will continue to grow like crazy, largely driven by Millennials.

Consumption – When Amazon launched the Kindle in 2007 Jeff Bezos talked about the concept of “information snacking”, where more short-form content is consumed, potentially at the expense of long-form reading. I’d argue that the iPad has done more to promote info snacking than the original Kindle but there’s no doubt that short-form content consumption is extremely popular. Whether it’s quick Facebook updates or 140-character tweets, Millennials have grown up in an era where communication brevity rules. Storytelling will never die but publishers of longer-form content need to make sure they have a model and products to remain relevant as Millennials become an even larger portion of the target market.

Value – What’s the value of digital content? The answer to that question largely depends on the age of the person being asked. Results of a recent survey note that the younger generation expects digital content to be free. That’s not terribly surprising given the lax file-sharing environments most of them have grown up in. Regardless of whether you believe we just need to better educate Millennials on copyright law the simple truth is they place a lower value on digital content than older generations tend to. Btw, part of the blame for this lower valuation belongs to publishers – when their digital offerings are just the print product on a device, oftentimes with even less functionality than the print version (e.g., inability to share, resell or simply give to someone else), why wouldn’t consumers place a lower value on the digital version?

Privacy – Despite all the times Facebook has been criticized for their official privacy settings, policies and monetization techniques, I’ve never heard anyone under 20 years old complain. Parental guidance is frequently required to prevent Millennials from posting things today they’ll regret tomorrow. Millennials have grown up with social tools and they generally love sharing. Just compare an 18 year-old’s Facebook page with that of a 40 year-old and you’ll see the difference. Most of the privacy advocates have gray and thinning hair while Millennials will probably always be more liberal when it comes to sharing updates and content.

How does your strategy stack up in these four areas? You may have ignored them up to now because your current customers are older. Have you stopped to consider that those current customers will continue to age and there will be fewer of them in the future?

For many years publishers created content, used it once and never considered its value beyond that initial use. Some publishers created remixes in the print-only era but everyone needs to explore content reuse in the digital age. At its heart, reuse leads to additional ROI on your initial content investment.

There are several questions publishers need to consider before they embark on a content reuse initiative. Here are five of the most important ones to answer:

1. What type of content are customers looking for?

Everything starts and ends with the customer. Is there really an opportunity for you to create new products around redeployed content? In most cases the answer is yes, but it’s important to first determine where customers are finding content solutions today and whether your strategy addresses any of their needs. Cannibalization is probably the biggest obstacle to overcome here. Too many publishers are afraid of jeopardizing their existing content revenue streams and end up allowing competitors to do it for them (see The Innovator’s Dilemma).

2. What reuse rights do you have?

In the short-form world most content is acquired on a work-for-hire basis with all rights in the publisher’s hands. That’s not always the case though as some noteworthy authors hang onto certain rights, including the ability to veto certain distribution channels and reuse. Things are a bit more complicated in the book world where publishers typically own all rights but usually have to pay authors a royalty for reuse; even if you have full rights you’ll need to figure out what portion of the revenue stream goes to each author, particularly for those products containing content from multiple authors. An additional layer of complexity comes into play for content signed with limited territorial distribution rights. The first step for any content distribution plan is for the publisher to determine exactly what rights they have and how well those rights align with the biggest sales opportunities.

3. What channels are you looking to expand into?

Where are the content redistribution opportunities? Where are consumers most likely to be looking? If you’re a newspaper publisher you’re focused on subscriptions and owning the customer relationship. That’s not always possible with digital content, particularly when you consider the big retailers who deal direct with readers but don’t pass that information to publishers. And don’t forget about the app stores for iOS and Android. Discovery is a critical issue here, so be sure to develop a promotional campaign that doesn’t rely on “if you build it, they will come.”

4. Is your content stored for optimal search, retrieval and reuse?

Publishers often overlook this critical item. They have a grand vision for content reuse, plans for marketing these new products and then discover they have no easy way to retrieve the content from their existing repository. In most cases that content wasn’t stored with search, retrieval and reuse in mind; it’s just where the content happens to be archived. If your CMS isn’t designed for reuse you’ll never be able to scale your efforts for the full opportunity.

5. Do you have content curation resources available?

Finally, you need someone (or a team) to help curate your content and create these new products. This is one of the most significant problems I see when talking with publishers. They love the idea but there’s no bandwidth in their organization to make it happen. Freelancing is an option but it’s important to clearly spell out expectations and make sure freelancers understand the product vision. This is also a terrific way to dip your toe in the water without making an add-to-staff commitment. Test the concept first with the variable cost of freelancers and as you build success stories you’ll be much better positioned to lobby for new, full-time positions to extend the program further.

Getty Images made an interesting content-usage model announcement last week. After years of playing whack-a-mole with everyone who’s ever stolen one of their images, Getty decided to embrace the free model for a portion of their library. You’ll find additional details on this here and here.

As a wise man once said, you can significantly reduce piracy if you make your content available at a reasonable price and in a convenient format.

OK, free is a pretty radical price and of course piracy evaporates when content becomes free. But it’s important to note that Getty isn’t just giving up and letting pirates have their way. They’ve introduced a model that I think could become a viable template for other types of content.

Note that Getty isn’t saying everyone can now just copy and paste the images into their sites. Getty is instead providing a snippet of HTML code you’ll use to legally embed the images on your site. This approach offers a number of benefits for Getty including tracking and, more importantly, a new potential revenue stream.

By embedding the code in your site Getty will be able to gather data about where their images are being viewed and who is viewing them. This data could eventually be valuable to Getty as they’ll suddenly have access to plenty of metrics they knew nothing about before. Unless you’ve been hibernating the past few years you know that big data can be quite valuable and it’s easy to see how Getty’s data will become big rather quickly.

What’s even more intriguing to me is how Getty will be able to control how those images are rendered on your site. The images live on Getty’s servers, much like YouTube videos live on Google’s servers.

Do you remember when YouTube videos didn’t have pre-roll ads? These days it’s rare to watch any YouTube video without first having to sit through a short ad.

Will embedded Getty images soon have ads in them? Maybe. It makes sense for Getty to at least experiment with ads. They’ll have plenty of opportunities to study all that data they’re gathering to determine the viability of ads with images.

What about other types of content? Magazine and newspaper articles come to mind. How often is that content illegally copied and pasted onto someone’s website? How often is the same content scraped off the publisher’s website and dropped into an app? The app might give credit to the publisher, and even offer a link to where the content originally appears on the publisher’s site, but how many times do readers get what they need from the ad-free scraped version and never click through to the publisher’s site? How many ad impressions are lost as a result?

What if publishers offered a model like Getty’s, so someone could grab a snippet of code to embed the article in their own site? That version would provide data and a possible advertising opportunity, just like Getty’s.

OK, I think I know what would happen… Most publishers would resist, saying they want the traffic coming to their own site and threatening legal action against anyone who copies and pastes illegally. The smart publisher, on the other hand, would instead embrace this for the data and new, alternative revenue opportunities it represents.

I can’t wait to see how Getty’s model evolves and whether it will expand into other types of content.

I love the concept of reselling your digital assets. Bought a bunch of songs you no longer care for? Resell them. Ebooks you've read and have no use for? Resell them. The used CD and bookstore model that works in the physical world will definitely be a vibrant component of the digital content world.

I've written about ReDigi before and today these pioneers of digital content resale have some terrific news to report: theyv'e been awarded a patent for their unique method of "copy-less" digital content resale. You can read the whole press release here but this is the key excerpt:

ReDigi’s patented technology provides significant opportunities to unlock the full value of digital content by creating a system and method for the resale of that content without actually having to make a copy.

Selling "used" digital content is a tricky concept for some people to accept. After all, an MP3 or an ebook can be copied endlessly, so how can there be a single version of it that can be sold by me and bought by you?

I believe ReDigi has the answer to that question and, more importantly, we'll all be reselling and buying much of our digital content through ReDigi (or ReDigi-powered services).

My biggest hope now is that someone like Amazon doesn't come along and swoop these guys up. After all, reselling digital content shouldn't be locked into a walled garden.

It's challenging keeping up with publishing industry news and analysis. I have way too many content feeds to monitor and I'm sure you do too. We do our best to highlight the most important developments on the TOC website but you're forgiven if you fall behind or miss an article every so often.

Most of analysis on the TOC site is somewhat timeless but the blog format might not make it feel that way. That's why we gathered the best of the best articles and assembled them for you in a handy, to-go version. It's called Best of TOC: Analysis and Ideas about the Future of Publishing. More than 60 of the most thought-provoking articles from the TOC team and community are featured and it's available in EPUB, mobi and PDF formats. Best of all, it's completely free.

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Putting section numbers to the side, we ask whether the “first sale” doctrine applies to protect a buyer or other lawful owner of a copy (of a copyrighted work) lawfully manufactured abroad. Can that buyer bring that copy into the United States (and sell it or give it away) without obtaining permission to do so from the copyright owner? Can, for example, someone who purchases, say at a used bookstore, a book printed abroad subsequently resell it without the copyright owner’s permission?

In our view, the answers to these questions are, yes. We hold that the “first sale” doctrine applies to copies of a copyrighted work lawfully made abroad.

Amazon has a patent and now Apple does too. I'm talking about the techniques both companies might use to let you resell your digital content. They join ReDigi, who already offers a platform to resell your digital music.

Ebooks are next, of course, and the concern I hear isn't so much about the legal aspect but rather the risk of cannibalization. Most publishers seem hung up on the notion that a used ebook sale will mean one less original sale for them. And even if they participate in the used ebook revenue stream, they're concerned that the selling price will be lower, so they'll make less when cannibalization happens. I think that's a very shortsighted view of the opportunity.

This isn't just about lower-priced versions of the original work. It's time to think about the added-value aspects of a used digital content platform.

I've written before about how consumer might be able to resell their highlights and notes. Let's take that a step further. What if someone reads a 300-page business ebook and condenses the key lessons into 10-20 pages? Think of it as the Cliffs Notes, summarized version. Let's further assume that reader bundles their summary with the original ebook they bought and sells it via a used ebook marketplace. Could they charge more for their version? Absolutely.

You're concerned about this being more attractive than the ebook by itself? You should be. But what if the publisher owns this platform? What if all these sales were done directly by them, so they're capturing 100% of the revenue stream and sharing the appropriate cut with the author? Now let's take it another step further... What if that reader isn't just able to sell the one copy they bought, but an unlimited number of copies that come bundled with their summary? The consumer price of this version would be higher than the version with the ebook by itself and the reader who created the summary would receive a portion of the difference between those prices, essentially making them a royalty-based author on the bundle.

Btw, there's no reason the original author couldn't create this summary instead of or in addition to whatever is created in the reader community. In fact, why not open this up to all readers to create their summary of the ebook and let consumers decide which version they want? Use a voting system so that the best summary writers build a reputation and generate the most income.

These summaries aren't limited to written material either. There's no reason video couldn't play a role here. There's also plenty of room for an idea I suggested a couple of years ago: The "VIP Notes Edition." The key is to create a model where author, publisher and summary writer all share in the revenue stream.

So let's stop thinking of the used ebook market as yet another step towards the race to zero content valuation. This is different from the used print book market and it represents some very interesting opportunities for publishers who are willing to embrace a new model.

The proposed final judgment in the ebook case says that settling defendants may enter into contracts with ebook retailers that prevent the retailer from selling a settling defendant’s ebooks at a cumulative loss over the course of one year. What does that mean for the future of ebook prices?

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The posts on this weblog are provided “AS IS” with no warranties, and confer no rights. The opinions expressed herein are my own personal opinions and do not necessarily represent those of my employer.